, NAIROBI, Kenya, Sep 30 – Unga Group has bought a substantial stake in its subsidiary Uganda Millers in a bid to reduce reliance on the Kenyan market.
The firm acquired a 40 percent stake in Uganda Millers through Unga Holdings. The buy-out will effectively increase its stake in the Ugandan subsidiary to 65 percent.
Currently the animal and human feeds manufacturer derives 93 percent of its sales from Kenya and seven percent from its Ugandan subsidiary.
The acquisition of the Ugandan subsidiary could help cushion declining sales which fell 1.36 percent in its full year ending June 30 with management expecting the introduction of 16 percent VAT of animal feeds to negatively affect sales going forward.
The firm posted a 45.5 percent rise in its full year profit ending June 30 from Sh348 million to Sh508 million attributing profits to growth margins in the animal health, nutrition and packaging business.
Operating profit rose 29 percent to Sh1.3 billion helped by crediting a retirement asset revaluation surplus of 198 million.
The company’s operating income grew from Sh103 million to Sh281 million while gross profit went up to Sh1.38 billion from Sh1.36 billion.